When to Retire: How to Make the Right Choice

When to retire?  Getting the answer to this question is by far one of the biggest decisions of your life. It’s also a choice that can cause a lot of stress. Here are five tips from Dr. Ruth Chang, a professor at Rutgers University and a world-renowned expert on how to make decisions, that may help you decide when is the appropriate time to retire.  While Chang is not a financial advisor or a retirement planner, she is highly sought-after for her decision-making expertise. Here are some of Dr. Chang’s ideas about the best ways to make decisions. These ideas can also be applied to making the right retirement decisions.

1. Retiring Is About Emotional Values, Not Scientific Facts

According to Chang, people often think that making decisions is about facts.  However, she believes that there are too many unknowns in the majority of big decisions, which makes it hard to rely on objective measures. For retirement, you don’t know how long you will live or if you will actually enjoy retirement. There are also a million other things you won’t know about retirement before you make the decision to retire because it’s impossible to know the future. Because of this, trying to base your decision about when to retire based only on the hard numbers may be unrealistic and the wrong way to make the choice.

2. What Is Most Important to You?

Instead of only relying on facts when you are making the decision about when to retire, a better tactic might be to assess your values and make the decision based on what is important to you. Is financial security most important?  Or, is making the most of every day a better way to express your personal philosophy? Figure out what is important to you about the decision and you will make a better choice.

3. Assess the Pros and Cons of the Decision

Think about everything that is relevant to the decision of when to retire, but remember to also focus on your values and what is important to you. Make lists and write down the advantages and disadvantages.

4. There Is No One Correct Answer

Chang believes that there is no one correct answer when it comes to many big decisions. Even if you have a list of pros and cons, there is no objective truth about the best time for you to retire. And there are a variety of ways to make any choice work out for you.

5. Commitment Is the Real Secret of Making the Right Decision

Chang philosophizes that by committing to a decision, you empower it to become the right decision.  Commitment is the key to a successful choice. Chang offers the following example to illustrate her point: “If you commit to being a neurosurgeon, as opposed to an investment banker, you will stand behind that path in a way you couldn’t have foreseen. You’ll actually regard the things that happen in the future differently than you would have, had you not committed to it. Suppose you go to medical school and you had no idea how tough medical school was going to be. If you’re not committed to being a neurosurgeon, you’ll take this as evidence that you should be doing something else.” When you commit to a retirement date of say May 2021, you can begin to do everything you need to do to make that a good decision, including figuring out when to start Social Security, assessing where to live, etc. If you are committed to your decision, then you can manipulate everything in your life to fulfill that choice.

Use Online Tools to Help You Figure Out Your When to Retire Decision

In addition to helping you weigh the pros and cons of a decision, a good online tool can enable you to commit to your choice. A simple retirement calculator can give you a quick directional answer for when you might be able to securely retire. However, these tools are not hugely accurate. The Boldin Retirement Planner can give you a much more reliable idea of when you can retire. And, help you identify opportunities for retiring earlier. Should you be saving more now?  Buying an annuity?  Downsizing your home? Will you have a retirement job? The tool makes it easy to try out different scenarios. It is highly detailed and offers a proven method for improving your financial situation.